What Trump’s Presidency Could Mean for Tesla and Other Electric Vehicle Makers | Global News Avenue

Donald Trump’s return to the White House has stoked optimism on Wall Street, with his business-friendly agenda expected to boost economic growth and ease regulations that eat into corporate profits.

However, electric car makers face a bleaker outlook than most other businesses. Trump’s rhetoric and campaign promises have put him at sharp odds with U.S. electric carmakers and the outgoing Biden administration. sufficient effort Promote electrification. But the president-elect’s close relationship with Tesla (Tesla) CEO Elon Musk has expressed doubts about how thoroughly he will deliver on his promise.

What Trump says about electric cars

Trump made his disdain for electric vehicles clear on the campaign trail. He said they were too expensive and insisted no one would buy them because they didn’t have enough range.

He called the Biden-era electrification efforts part of the “New Green Hoax” and a play on the “Green New Deal,” a set of policy proposals aimed at combating climate change. He said he would “end the electric vehicle mandate from day one,” referring to a recently enacted regulation on vehicle emissions standards. Environmental Protection Agency (EPA) This requires U.S. automakers to significantly reduce emissions from their vehicles over the next decade.

Trump said throughout the campaign that this and other electric vehicle policies were killing U.S. jobs in favor of China and Mexico.

What Trump is expected to do

Trump is expected to eliminate the existing $7,500 electric vehicle tax credit, making electric vehicle purchases unavailable to more consumers and boosting sales of internal combustion engine models. That could benefit Detroit’s Big Three automakers — Ford (F), General Motors (General Motors) and Stratis (STLA)—its gasoline-powered cars are much more profitable than electric cars.

Trump’s EPA may also repeal emissions standards rules this year, taking pressure off the Big Three automakers to continue their costly electrification efforts.

However, Elon MuskBeing Trump’s most important backer in the final months of the election cycle may prevent him from completely abandoning all of Biden’s electric vehicle plans. A Republican-led Congress could protect billions of dollars earmarked by Biden-era legislation to fund the construction of electric vehicle and battery factories in red states.

Who benefits from the Trump presidency?

“We believe a Trump presidency is clearly an overall negative for the EV industry,” Wedbush analysts wrote last week.

Bank of America analysts on Friday downgraded electric truck maker Rivian (Rivigne) stocks, citing the potential for regulatory changes as a key reason. With Trump re-elected, analysts wrote, “it may become more difficult for consumers to obtain IRA credit and regulatory credit pricing may be disrupted, which would put further pressure on profitability.”

The prospects of all-electric manufacturers such as Rivian and Tesla may hinge on EV credits, which they sell to competitors to offset sales of their gasoline-powered vehicles. Rivian last week forecast it would sell $300 million in regulatory credits this year. This year alone, Tesla has sold more than $2 billion in credits.

Wedbush said Tesla is less reliant on credit than smaller upstarts and may even benefit from reduced government support for electric vehicles.

Tesla’s “unparalleled” scale and long history of building profitable electric vehicles could give it “a distinct competitive advantage in a non-EV subsidy environment.” Tesla’s lead in the U.S. market may also be cushioned by higher tariffs on Chinese imports, which could “continue to prevent cheaper Chinese EV players (BYD, NIO, etc.) from flooding the U.S. market in the coming years ”